Chariot to launch VoIP - months behind schedule

Stuart Corner
Sunday, 27 November 2005 17:51

Business IT - Technology

ASX listed ISP, Chariot, will launch its VoIP service in December, almost a year later than planned, along with wireless broadband access services.

"The launch of both VoIP and high speed wireless Internet at the close of calendar 2005 will generate a fundamental change in Chariot's character," the company's managing director, Robert Horlin-Smith, said."

In a statement the company said: "The VoIP service will follow the commissioning of Transcom's initial call switching and billing platform being installed in Sydney, following which, Transcom International will be in a position to roll out its VoIP technology globally.

Chariot will be providing VoIP to VoIP connections free and VoIP to off-net services at 5 cents per minute to major destinations globally. Horlin-Smith said Chariot VoIP could be used from existing phone devices which default to the PSTN if necessary and is 000 compliant.

A year ago almost to the day, Chariot announced plans to launch a VoIP service early in 2005 in partnership with US and UK based softswitch manufacturer, Transcom, in which it had taken equity.

Under that deal Chariot paid $5 million to Transcom for an 80 percent shareholding in Transcom Australasia Pty Ltd, the system licensee for the region, and a 37.74 percent equity interest in Transcom Australasia's parent entity, Transcom International. Transcom International said it planned to license the system and its associated softswitch technology in more than 60 countries.

Chariot said at the time that it expected to break even on its investment in the project by 30 June 2005. "We expect Transcom Australasia to contribute positively to Chariot's earnings for the first full year of operation, 2005-2006, as EBITDA margins will exceed 25 percent," managing director Julian Horlin-Smith said. This projection was based on Transcom International having at least 5,000 VoIP customers by 30 June 2005, 15,000 by 30 June 2006 and 30,000 by 30 June 2007.

This week, chairman Peter Buttery told shareholders at the company's AGM that: "By June 2006 we have targeted a total of 5,000 VoIP customers in Australia. By June 2007 we have targeted a total of 20,000 VoIP customers in Australia.."

He rather glossed over the company's failure to meet its earlier goals, and the impact on revenues, telling shareholders at the AGM only that: "The company...bore high interest costs due to the upfront payment of $5 million in November 2004 for our investment in Transcom and the roll-out of our VoIP product which due mainly to technical factors, has been delayed to the current December quarter of 2005."